Securities America pays $100,000 fine
April 30, 2013 by Dan Jamieson
Securities America Inc. has agreed to pay a $100,000 fine to the Financial Industry Regulatory Authority Inc. over e-mail violations.
In a settlement finalized last Friday, the independent broker-dealer also agreed to review, test and certify that its supervisory systems have been fixed.
The violations arose over a series of e-mails sent by three registered representatives. Finra claimed the e-mails contained misleading statements about the safety and liquidity of two troubled private placements -— IMH Fund and Med Cap V notes.
Finra charged that from October 2007 through August 2008, Securities America’s email-monitoring
system failed to identify numerous messages sent by the brokers that repeatedly used words and phrases such as “completely liquid,” “safe,” “safety” and “guaranteed.”
Both of the investments had significant risks and were not liquid, Finra alleged in the settlement agreement.
Securities America did not admit to any wrongdoing in concluding the case.
Calls to spokespersons at the firm were not immediately returned Monday.
The IMH Fund invested in short-term commercial mortgage loans, Finra said, and MedCap V was formed to provide financing to healthcare providers by purchasing their accounts receivable.
The Securities and Exchange Commission charged MedCap officials with fraud in 2009 over their next program, MedCap VI.
The Justice Department later filed criminal charges against Medical Capital president Joseph Lampariello, who pleaded guilty to wire fraud last May. Criminal authorities charged that proceeds from MedCap VI were used to pay investors in past programs.
In October 2008, the IMH Fund ceased accepting new investments and suspended redemption requests, according to filings with the SEC. In 2009, it suspended monthly distributions.
Separately, LPL Financial LLC’s chief executive Mark Casady told analysts last Thursday that the company expects to settle an e-mail surveillance case sometime this quarter. The case against LPL was also brought by Finra.
